chapter  4
18 Pages

The Global Capitalist Crisis and World Depression

ByJames Petras

All the idols of capitalism over the past three decades have crashed. The assumptions and presumptions, the paradigms, and the prognosis of indefinite progress under liberal free market capitalism have all been tested and have failed. We are living the end of an entire epoch: Experts everywhere witness the collapse of the U.S. and world financial systems, the absence of credit for trade and the lack of financing for investment. A world depression, in which upward of a quarter of the world’s labor force will be unemployed, is looming. The biggest decline in trade in recent world history-down 40 percent year to year-defines the future. The imminent bankruptcies of the biggest manufacturing companies in the capitalist world haunt Western political leaders. The “market” as a mechanism for allocating resources and the government of the U.S. as the “leader” of the global economy have been discredited (Financial Times 2009b). All the assumptions about “selfstabilizing markets” are demonstrably false and outmoded. The rejection of public intervention in the market and the advocacy of supply-side economics have been discredited even in the eyes of their practitioners. Even official circles recognize that “inequality of income” contributed to the onset of the economic crash and should be corrected. Planning, public ownership and nationalization are on the agenda, while socialist alternatives have become almost respectable.